20000329

CSCE sugar ends up, May poised to pierce 5.50 cts

NEW YORK: CSCE raw sugar futures settled higher Monday on the strength of trade buying and steady spread activity, with key May poised to charge past near-term resistance at 5.50 cents.

"The lead buyers were trade houses," Jim Cassidy, first vice-president of FIMAT Futures USA. "Continued differential activity has been a positive influence (on sugar prices)."

May sugar rose 0.09 cent to finish at 5.47 cents a lb after trading 5.50-5.37 cents. July went out 0.07 higher at 5.45 cents and October SBV0 increased 0.05 to 5.78 cents. The rest rose 0.03 cent.

Sugar opened virtually flat and then headed north as trade buying gave it a lift, floor sources said.

Cargill, which has been a steady buyer over the past few sessions, was said to again be picking up stuff in the market. Another noted buyer was ED & F Man, brokers said.

Benchmark May briefly touched the 5.50-cent mark which had represented solid resistance, but pulled back due to the influx of origin pricing above the market.

"There's good producer selling from the 5.50 (cents) level on up," said Cassidy.

Cash values were said to remain steady with Thai raw sugar premiums up and Indonesia said to remain a steady buyer in the market.

Industry sources in Bangkok said Monday that Thai raw sugar premiums perked up due to an expected uptick in seasonal demand from Japan and expectations China will soon be in the market to buy Thai sugar, a belief not shared by some brokers here.

Raw sugar prices may power its way to the psychologically important mark of 6.00 cents due to a slew of near-term supportive factors, according to the weekly futures report of Prudential Securities on Monday.

Analyst Arthur Stevenson said sugar may get a boost from the current interest in Thai sugar, steady Russian buying, the downward revision by the International Sugar Organisation (ISO) of its 1999/2000 global sugar surplus and fund buying.

"While we still do not view the long-range fundamentals bullishly, sugar futures have inched higher and we look for an advance (in the benchmark CSCE May sugar contract) to the 5.70- to 6.00-cent level," he said.

Steady Russian buying, while difficult to quantify at this stage, has likewise contributed to recent sugar price strength, the Prudential report stated.

The ISO recently trimmed its forecast for a global surplus of 3.59 million tonnes, down from a previous prediction of a 4.76 million tonne surplus. But the cumulative surplus at the end of August will still hit more than 20 million tonnes.

Technicians said May seems ready to breach 5.50 and hit stops which would enable the contract to approach the overhead gap and resistance of 5.62-5.65 cents. Beyond that, the area of 5.70 cents beckon.

Support remained intact at 5.25-5.35 cents.

Estimated final volume reached 19,669 lots, against the previous estimated volume of 24,705 lots.

The CSCE is a subsidiary of the New York Board of Trade.-Reuters